Niche Envy: Marketing Discrimination in the Digital Age

236 Pages·2006·1.33 MB·English

by  Joseph Turow

business/technology and society
“Many people have written about the perils and promise of database marketing, especially JOSEPH TUROW
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as it has become turbocharged by the internet. But few have done as insightful a job as
Joseph Turow. His description of ‘marketing discrimination’ was an eye-opener for me, one U NICHE
of those rare new concepts that will never let you look at the world the same way again.” R ENVY
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Tim O’Reilly, founder and ceo,O’Reilly Media
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“Turow has beautifully sketched the rich history of customer categorization—attempts Marketing Discrimination
both large and small to place consumers into boxes and then narrow their choices or fields in the Digital Age
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of view accordingly. His analysis comes at a time when electronic commerce, both on- and
offline, is poised to offer more boxes and do more with them. He offers valuable policy
Joseph Turow, called by the New York Times “probably the I
recommendations to help customers make sense of the corporate terrain they inhabit, and
reigning academic expert on media fragmentation,” is Robert C NI
explains why ‘privacy policy’ won’t solve most of these problems.” C
Lewis Shayon Professor and Associate Dean for Graduate H
E We have all been to Web sites that welcome us by name,
Studies at the Annenberg School for Communication, Jonathan Zittrain, Professor of Internet Governance and Regulation, University of Oxford H ENV offering us discounts, deals, or special access to content. For
University of Pennsylvania. He is the author of Breaking Up Y
the most part, it feels good to be wanted—to be valued as a
America: Advertisers and the New Media World,among other
E customer. But if we thought about it, we might realize that
books, and the editor of The Wired Homestead (mit Press,
we’ve paid for this special status by turning over personal
2003).
information to a company’s database. And we might wonder
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whether other customers get the same deals we get, or some-
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tising, and society. If the new goal of marketing is to customize
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commercial announcements according to a buyer’s preferences
and spending history—or even by race, gender, and political
opinions—what does this mean for the twentieth-century
tradition of equal access to product information, and how
does it affect civic life?
Turow shows that these marketing techniques are not
the mit press wholly new; they have roots in direct marketing and product
Massachusetts Institute of Technology placement, widely used decades ago and recently revived and
Cambridge, Massachusetts 02142 reimagined by advertisers as part of “customer relationship
http://mitpress.mit.edu
management”(known popularly as crm). Hetraces the trans-
formation of marketing techniques online, on television, and
0-262-20165-8
in retail stores. And he describes public reaction against data-
978-0-262-20165-0
base marketing—pop-up blockers, spam filters, commercial-
S A L E skipping video recorders, and other ad-evasion methods.
Polls show that the public is nervous about giving up personal
data. Meanwhile, companies try to persuade the most desir-
able customers to trust them with their information in return
Book design by Sharon Deacon Warne for benefits. Niche Envytracks the marketing logic that got us
Jacket design by Derek George to this uneasy impasse.
Niche Envy

Niche Envy
Marketing Discrimination in the Digital Age
Joseph Turow
The MITPress
Cambridge, Massachusetts
London, England
© 2006 Massachusetts Institute of Technology
All rights reserved. No part of this book may be reproduced in any form by any elec-
tronic or mechanical means (including photocopying, recording, or information
storage and retrieval) without permission in writing from the publisher.
For information on quantity discounts, please email [email protected].
Set in Stone Sans and Stone Serif by the MIT Press. Printed and bound in the United
States of America.
Library of Congress Cataloging-in-Publication Data
Turow, Joseph
Niche envy : marketing discrimination in the digital age / Joseph Turow
p. cm.
Includes bibliographical references and index.
ISBN-10 0-262-20165-8 (alk. paper)
ISBN-13 978-0-262-20165-0 (alk. paper)
1. Consumer profiling. 2. Market segmentation. 3. Marketing—Technological
innovations. 4. Customer services—Technological innovations. I. Title.
HF5415.32.T95 2002
658.8'34—dc22
2005058409
10 9 8 7 6 5 4 3 2 1
Contents
Acknowledgements vii
1 A Major Transformation 1
2 Confronting New Worries 21
3 Drawing on the Past 45
4 The Internet as Test Bed 71
5 Rethinking Television 99
6 The Customized Store 125
7 Issues of Trust 149
8 Envy, Suspicion, and the Public Sphere 177
Notes 193
Index 217

Acknowledgements
This project could not have been carried out without the help of tens of
individuals from media companies, marketing communication firms,
banks, supermarkets, department stores, and consulting firms who patient-
ly let me question them about their work. I mention many of these people
by name in the book. I don’t cite others (sometimes at their request), but
their observations were nevertheless crucial in pointing me in important
research directions. I hope that marketing and media industry personnel
reading these lines will share some of their valuable time with academic
researchers who contact them. Apart from being kind, they will be helping
to contribute a multiplicity of viewpoints to writings that may become
central to public discussions of their business.
In many cases, I contacted sources because they were mentioned in
articles I read in trade magazines or because they appeared on panels at
industry meetings I attended. The industry meetings were useful for con-
firming, extending, or refuting what I learned in “the trades.” I have been
reading Advertising Ageand Varietyhabitually for about four decades, and I
have been a visitor to Mediapost’s online daily newsletters since their
inception several years ago. This literature has helped to shape my under-
standing of the basic contours of the media-and-marketing system. In
addition, the Nexis and Factiva databases have made it practical to explore
particular topics in depth across a wide range of industry periodicals (such
as Adweek, PR Week, Progressive Grocer, and Chain Store Age) and government
agency publications. I have also benefited from reports from media and
marketing consulting firms, such as Forrester Research, Jupiter Research,
and E-Marketer. I am grateful to the University of Pennsylvania’s
Annenberg School for Communication and to the university’s library sys-
tem for providing access from my office desk to these and many other rich
intellectual resources.
viii Acknowledgements
Michael Delli Carpini, dean of the Annenberg School for Communi-
cation, has provided an encouraging environment for research through his
personal style and his adjustment of the faculty course load with an eye
toward the production of knowledge. Some years ago, Kathleen Hall
Jamieson, Director of the University of Pennsylvania’s Annenberg Public
Policy Center, asked me to head the Center’s Information and Society divi-
sion. The post came with the funds to carry out the national surveys that
I discuss in chapters 7 and 8. All this has taken place within a school whose
faculty members not only have been collegial but have really cared about
and supported one another. It has been a great environment in which to
work, and I thank my colleagues for fostering it.
Annenberg School graduate students Mary Bock, Lee Shaker, and
Lokman Tsui have tracked down documents for me and, more important,
have critiqued portions of the evolving manuscript. My thinking on
topics in this book has also benefited enormously from discussions with
Jatin Atre, Beau Brendler, Rich Cardona, Kyle Cassidy, Eszter Hargittai,
Chris Hoofnagle, Elihu Katz, Toby Levin, Rob Mayer, Matt McAllister, Lee
Rainie, Marc Rotenberg, and Jonathan Turow; I apologize to anyone I have
accidentally omitted. At The MIT Press, Robert Prior has been an enthusi-
astic and supportive editor, and Valerie Geary has been a congenial contact
person.
I have particularly benefited from discussing evolving book ideas with
my wife, Judy Turow. She has had the patience to hear me out, be support-
ive, and critique me honestly, even in contexts (movie theaters, family
trips) where my raising these rather specialized topics probably was less
than appropriate. I thank her most of all.
Niche Envy